The Taylor principle and global determinacy in a non Ricardian world

Jean-Pascal Benassy and Michel Guillard ()

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Abstract: The Taylor principle is quite usually considered as a central condition for price determinacy. Recently, however, this has been questioned on several grounds, notably because (i) this condition is a condition for local determinacy, not global determinacy (ii) it has been derived in "Ricardian" economies, and it appears that going to a non-Ricardian framework makes a very big difference for the determinacy conditions. In this paper we scrutinize the two issues together, and we find that for non-Ricardian equilibria the Taylor principle is replaced by another "financial dominance" criterion.

Keywords: Taylor principle; Taylor rules; global determinacy; price determinacy; non Ricardian economies; non Ricardian equilibria; Principe de Taylor; règles de Taylor; détermination globale; équilibres non Ricardiens; économies non Ricardiennes (search for similar items in EconPapers)
Date: 2005-12
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00590558v1
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Citations: View citations in EconPapers (2)

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Working Paper: The Taylor Principle and Global Determinacy in a Non-Ricardian World (2005)
Working Paper: The Taylor principle and global determinacy in a non Ricardian world (2005)
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